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SSE (SSE)

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funduffer
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Re: SSE (SSE)

#358798

Postby funduffer » November 21st, 2020, 3:55 pm

richfool wrote:But what is SSE proposing to do with the proceeds of its sale of green assets, and why is it selling green assets at all? Are they really "non-core" assets?

It seems the likes of SSE are in the business of developing new Green infrastructure assets, like windfarms, but not so much in operating them over the long term, particularly if they are joint ventures. They prefer to recycle the capital into new green ventures.

Hence companies like Greencoat UK Wind (UKW), who are in the business of acquiring such assets and running them through their life, buy them up. They seem to produce steady and unspectacular returns on these assets over 20years+, paying a decent dividend (current yield is 5.3%). NIce way to generate some steady retirement income.

There is a very long, but interesting thread on green infrastructure investment here:

viewtopic.php?f=8&t=17343

I have small stakes in both SSE and UKW.

UncleEbenezer
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Re: SSE (SSE)

#358967

Postby UncleEbenezer » November 22nd, 2020, 9:53 am

funduffer wrote:It seems the likes of SSE are in the business of developing new Green infrastructure assets, like windfarms, but not so much in operating them over the long term, particularly if they are joint ventures. They prefer to recycle the capital into new green ventures.

Hence companies like Greencoat UK Wind (UKW), who are in the business of acquiring such assets and running them through their life, buy them up. They seem to produce steady and unspectacular returns on these assets over 20years+, paying a decent dividend (current yield is 5.3%). NIce way to generate some steady retirement income.

I've tended to view the green infrastructure funds as complementary to a lot of more speculative development projects, many of them entrepreneurial rather than backed by an established bigco. Sale to UKW or its peers being the entrepreneur's exit strategy. And with the likes of SSE having a foot in both camps.

A view formed back in the days when SSE was best-known as a utility company. A supplier to consumers.

Is SSE's business evolving into something that sits uneasily with a utility company's level of long-term debt?

Dod101
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Re: SSE (SSE)

#358985

Postby Dod101 » November 22nd, 2020, 11:31 am

SSE have always been a generator and controller of the grid in the northern half of Scotland. The retail side was always very small in comparison and no doubt they are glad to be rid of the hassle. They have also always been in renewable energy and 'green ' power. See their hydro electric schemes, dating back to the Second World War.

Dogger Bank is I think just a development of that philosophy, although a big one of course.

Dod

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Re: SSE (SSE)

#358998

Postby UncleEbenezer » November 22nd, 2020, 12:36 pm

Dod101 wrote:SSE have always been a generator and controller of the grid in the northern half of Scotland. The retail side was always very small in comparison and no doubt they are glad to be rid of the hassle. They have also always been in renewable energy and 'green ' power. See their hydro electric schemes, dating back to the Second World War.
Dod

Indeed, that's why I invested in SSE in the first place. The "safe haven" (albeit politically exposed) of a utility, combined with the most significant renewables programme of any in its peer group.

That was before (or perhaps in the infancy of) the era of renewables infrastructure funds. It's an evolving field. And in terms of developing new assets, if many are in that game with a view to no dividends but making profit from a sale once the asset becomes operational, that kind-of makes an oddball of a bigco carrying long-term debt and paying a big divi.

Or maybe it's my perspective that's flawed, and the entrepreneurial ventures are just a small part of the market?

idpickering
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Re: SSE (SSE)

#360127

Postby idpickering » November 26th, 2020, 7:10 am

DOGGER BANK WIND FARM

SSE Renewables, together with its 50:50 joint venture partner, Equinor, has reached financial close on the first two phases of what will be the world’s biggest offshore wind farm.

The two companies are proceeding with the first two phases of Dogger Bank Wind Farm, a ground-breaking project off the north east coast of England which, once all three phases are complete in March 2026, will be the largest in the world.

Each phase has a capacity of 1,200MW and will generate around 6,000GWh. In total, Dogger Bank will produce enough clean, renewable electricity to supply 5% of the UK’s demand, equivalent to powering six million UK homes.

The funding of the development of Dogger Bank A and B represents the largest ever offshore wind project financing anywhere in the world and SSE’s expected equity investment forms part of its £7.5 billion investment programme to March 2025, the renewables element of which will double its renewables output by 2025.

Total investment in the first two phases of the project will be around £6 billion and has already created hundreds of UK jobs, with more to come as project construction ramps up.

Dogger Bank Wind Farm is the largest of SSE Renewables’ projects currently in construction. SSE Renewables is currently also leading the construction of the Seagreen offshore wind farm (1,075MW, SSE Renewables share 49%), which will be Scotland’s largest on completion, and the wholly-owned Viking wind farm (443MW), the UK’s most productive onshore wind farm. Together these flagship renewable energy projects are driving SSE Renewables’ significant growth to 2025 and demonstrate the quality and value of its development portfolio.


https://www.investegate.co.uk/sse-plc-- ... 00065950G/

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Re: SSE (SSE)

#360210

Postby richfool » November 26th, 2020, 11:04 am

Cross post picked up from the HL website under SSE news, but is also in several other sources:
UK government to double subsidies for renewable energy in 2021

viewtopic.php?f=16&t=11176&p=360204#p360204

idpickering
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Re: SSE (SSE)

#362782

Postby idpickering » December 4th, 2020, 7:13 am

Sale of stake in Dogger Bank Wind Farm

SSE has entered into an agreement to sell a 10% stake in the first two phases of Dogger Bank Wind Farm to Eni for an equity consideration of £202.5m, subject to adjustments for interest on closing. SSE intends to use the proceeds to enable delivery of its low carbon growth plans. Divesting this stake in Dogger Bank Wind Farm is in line with SSE's stated intention to partner to capitalise on its significant growth opportunities related to net zero.

Eni has also entered into an agreement to purchase a 10% stake in Dogger Bank A & B from project partner Equinor. Once the transaction is complete, the new overall shareholding in Dogger Bank A (1,200MW) and Dogger Bank B (1,200MW) will be - SSE (40%), Equinor (40%) and Eni (20%).

The transaction is expected to complete in early 2021, subject to regulatory and lender approvals. There is no change to the ownership of the third phase, Dogger Bank C (1,200MW), in which SSE and Equinor each have a 50% stake. SSE Renewables will continue to lead on the development and construction of Dogger Bank Wind Farm, and Equinor will operate the asset on completion.


https://www.investegate.co.uk/sse-plc-- ... 00025303H/

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Re: SSE (SSE)

#362822

Postby daveh » December 4th, 2020, 9:19 am

Its interesting that:

Gain on sale and financial outlook 2020/21

At its half year results in November 2020, SSE stated that it expected adjusted earnings per share for 2020/21 to be in the range of 75 pence to 85 pence including the gain on disposal of an equity stake in Dogger Bank Wind Farm. Following the successful conclusion of the Dogger Bank A & B equity stake disposal, SSE now expects adjusted earnings per share for 2020/21 to be in the range of 85 pence to 90 pence, including an EPS impact from the gain on sale of around 19 pence after transaction costs.


That seems like a nice gain on the sale.

Presumably by reducing their stake to 40% that is also reducing SSE's share of the ongoing construction costs?

idpickering
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Re: SSE (SSE)

#364121

Postby idpickering » December 8th, 2020, 4:00 pm

SSEN Transmission response to Ofgem Determinations

SSEN Transmission notes today's publication of Ofgem's Final Determinations for the RIIO-T2 price control.

The next decade will be critical in making the progress required to place the country on a clear pathway to net zero emissions and delivering on the policies recently set out in the Prime Minister's ten-point plan. SSEN Transmission's RIIO-T2 business plan, co-created with its stakeholders following over two years of engagement, places tackling climate change at its heart, as evidenced by it becoming the world's first network company to be accredited with a science-based greenhouse gas emissions target consistent with net zero pathways. The regulatory framework must therefore act as an enabler to net zero delivery, as well as support wider stakeholder ambitions.

Following an initial review of Ofgem's Final Determinations, SSEN Transmission welcomes the positive movement in total expenditure (TOTEX) to £2.16bn. Further work is required to assess whether this level of TOTEX is commensurate with delivering the outputs stakeholders demanded and the investment required to deliver Governments' net zero targets. However, SSEN Transmission is very disappointed that Ofgem has not fully reflected the robust evidence - particularly that from the Competition and Markets Authority (CMA) provisional findings of the PR19 water price control appeal - in setting the financial parameters for RIIO-T2, which SSEN Transmission expected to be at least in line with the CMA's provisional findings.

With more material still to be released by Ofgem, SSEN Transmission will continue to review and assess the detail as it is published - including the proposed licence changes due to be consulted upon shortly - and will continue to work with Ofgem, industry and stakeholders to seek to resolve outstanding points of difference. SSEN Transmission will continue to keep all options open to secure an ambitious, fair and balanced price control settlement that meets the needs of all stakeholders and appropriately balances risk and reward.


https://www.investegate.co.uk/sse-plc-- ... 22258898H/

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Re: SSE (SSE)

#364197

Postby Bouleversee » December 8th, 2020, 7:10 pm

This was on ADFN's morning bulletin today, which is quite comforting:

SSE rose 2.9% and National Grid added 1.42% as Ofgem said it would cut the amount of money that energy networks can give to shareholders by less than initially set out.

The energy regulator said companies would be allowed to pay a return on equity of 4.3%, up from a previous 3.95%.

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Re: SSE (SSE)

#368790

Postby idpickering » December 22nd, 2020, 2:33 pm

SSE AGREES SALE OF GAS EXPLORATION AND PRODUCTION ASSETS

SSE plc has agreed to sell all of its interests in its portfolio of gas exploration and production (E&P) assets to Viaro Energy via its subsidiary RockRose Energy Limited for a total consideration of £120m*. The transaction is based on a 'locked box' economic date of 31 March 2019 and is subject to regulatory approval and partner consent.

The diverse portfolio comprises non-operational equity shares in over 15 producing fields in three regions in the North Sea: the Easington Catchment Area, the Bacton Catchment Area, and the Greater Laggan Area.


https://www.investegate.co.uk/sse-plc-- ... 39015670J/

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Re: SSE (SSE)

#368802

Postby Bouleversee » December 22nd, 2020, 2:59 pm

idpickering wrote:SSE AGREES SALE OF GAS EXPLORATION AND PRODUCTION ASSETS

SSE plc has agreed to sell all of its interests in its portfolio of gas exploration and production (E&P) assets to Viaro Energy via its subsidiary RockRose Energy Limited for a total consideration of £120m*. The transaction is based on a 'locked box' economic date of 31 March 2019 and is subject to regulatory approval and partner consent.

The diverse portfolio comprises non-operational equity shares in over 15 producing fields in three regions in the North Sea: the Easington Catchment Area, the Bacton Catchment Area, and the Greater Laggan Area.


https://www.investegate.co.uk/sse-plc-- ... 39015670J/


So is the £390m the total decommissioning cost of which SSE is committed to paying £234m and they are only going to get £120m for the sale and not much of that initially? Anyone know what a "locked box economic date means"? Why are they decommissioning if the exploration and production rights have been sold. Struggling to get my brain round this deal but presumably they know what they are doing. I won't open the bubbly yet, however.

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Re: SSE (SSE)

#368819

Postby Dod101 » December 22nd, 2020, 3:39 pm

Bouleversee wrote:
idpickering wrote:SSE AGREES SALE OF GAS EXPLORATION AND PRODUCTION ASSETS

SSE plc has agreed to sell all of its interests in its portfolio of gas exploration and production (E&P) assets to Viaro Energy via its subsidiary RockRose Energy Limited for a total consideration of £120m*. The transaction is based on a 'locked box' economic date of 31 March 2019 and is subject to regulatory approval and partner consent.

The diverse portfolio comprises non-operational equity shares in over 15 producing fields in three regions in the North Sea: the Easington Catchment Area, the Bacton Catchment Area, and the Greater Laggan Area.


https://www.investegate.co.uk/sse-plc-- ... 39015670J/


So is the £390m the total decommissioning cost of which SSE is committed to paying £234m and they are only going to get £120m for the sale and not much of that initially? Anyone know what a "locked box economic date means"? Why are they decommissioning if the exploration and production rights have been sold. Struggling to get my brain round this deal but presumably they know what they are doing. I won't open the bubbly yet, however.


At 30 September 2020 they charged a provision for decommissioning costs of £390.1 million against the Gas E & P assets held for sale (presumably those now being sold) As you say selling for £120 million but only £25 million right now and the rest later but the outstanding balance is at least attracting a decent rate of interest. I hope they have some security against the loan. And then when it comes to decommissioning of the assets, they are to contribute £234 million. Not much of a deal but presumably the assets have a limited life.

This is surely a good thing though as it helping to raise some cash, (or in this case more like removing a liability) and helping to tidy up the company in general.

Dod

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Re: SSE (SSE)

#368826

Postby Bouleversee » December 22nd, 2020, 3:48 pm

Thanks, Dod. As you say, more like removing a liability. I don't quite see where the small profit they refer to comes in. However, they are moving in the right direction and are perhaps more on course than Shell or BP.

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Re: SSE (SSE)

#368831

Postby idpickering » December 22nd, 2020, 3:54 pm

Bouleversee wrote:Thanks, Dod. As you say, more like removing a liability. I don't quite see where the small profit they refer to comes in. However, they are moving in the right direction and are perhaps more on course than Shell or BP.


If I may interrupt Lorna. That's my sentiments towards SSE too. So much so, that my scheduled purchase of more of their shares happened this morning. I'm pleased with how they're operating, particularly in relation to getting more involved in wind turbines.

Ian.

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Re: SSE (SSE)

#382946

Postby idpickering » February 2nd, 2021, 7:17 am


Dod101
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Re: SSE (SSE)

#382961

Postby Dod101 » February 2nd, 2021, 9:01 am

Thanks Ian. No surprises and I am content with that.

Dod

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Re: SSE (SSE)

#383256

Postby idpickering » February 3rd, 2021, 7:00 am

Q3 2020/21 TRADING STATEMENT

FINANCIAL OUTLOOK
SSE updated the market on its expectations for full-year 2020/21 adjusted earnings per share on 4
December 2020 and still expects that it will be in the 85 pence to 90 pence range, based on the following
assumptions:
 Normal weather conditions prevailing for the final three months of the year. For the nine months
to 31 December 2020, renewables output was just over 5% below plan.
 The impact of coronavirus on full-year operating profit being towards the middle of the £150m to
£250m range originally estimated in SSE's Full-year Results in June 2020.
SSE intends to recommend a full-year dividend of 80p per share plus RPI for 2020/21 and continues to
target annual RPI increases to 2023 as set out in its five-year dividend plan.


https://www.sse.com/media/3j2dgdlw/2021 ... nt-vf2.pdf

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Re: SSE (SSE)

#391548

Postby daveh » March 2nd, 2021, 3:04 pm

SSEN Transmission appeals Ofgem's RIIO-T2 licence modification decision to the CMA
https://www.investegate.co.uk/sse-plc-- ... 00048776Q/

as with National Grid mentioned here:
viewtopic.php?f=94&t=16990&start=60

SSE is to appeal OFGEM's RIIO-T2 price control settlement to the CMA

he appeal is both technical and narrow in scope, focussed on areas where Ofgem's decision does not reflect the robust evidence provided throughout the price control process, alongside material errors in the decision. These are:

· Cost of Equity which SSEN Transmission remains disappointed does not reflect market conditions and the robust evidence provided throughout the price control process.

· Outperformance wedge which goes against established regulatory practice by assuming, rather than incentivising, outperformance.

· New exposure to transmission charges which unfairly expose Transmission Owners to any under recovery of the NGESO's own revenue from the market (i.e. to Transmission Network Use of System charges that the NGESO is responsible to recover from users of the transmission system).

· Loss of appeals right for additional TOTEX released through Uncertainty Mechanisms and TOTEX adjustments made following an outputs assessment, which goes against established regulatory practice, creating unacceptable risk and precedent for future price controls.

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Re: SSE (SSE)

#400244

Postby idpickering » March 30th, 2021, 7:33 am

NOTIFICATION OF CLOSED PERIOD

SSE plc is due to publish its financial results for the year ending 31 March 2021 on 26 May 2021.

FINANCIAL OUTLOOK

In its Q3 Trading Statement on 2 February, SSE reiterated its expectation that full year 2020/21 adjusted earnings per share would be in the 85 pence to 90 pence range, based on assumptions about weather conditions and the impact of coronavirus. Since then:

· Weather conditions have meant that the shortfall in output from renewable sources has increased from 5% below plan for the nine months to 31 December 2020, to around 9% below plan as at 23 March.

· However, SSE now expects the impact of coronavirus on adjusted operating profit to be around £180m for the full year, compared to the previously forecast £150m - £250m range.

In light of the above, SSE continues to expect to report adjusted earnings per share in that 85 pence to 90 pence range for the full year. Net debt is now expected to be around £9bn at 31 March 2021.

SSE intends to recommend a full-year dividend of 80p per share plus RPI for 2020/21 and continues to target annual RPI increases to 2023 as set out in its five-year dividend plan.


https://www.investegate.co.uk/sse-plc-- ... 00068617T/


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